### Order 2014

- 1

- 2

Served: January 6, 2014



## UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6 th 

### day o f January , 20 1 4

Essential Air Service at

PORT ALEXANDER, ALASKA DOCKET DOT

- OST

- 1999

- 6244

under 49 U.S.C. 41731 et seq.



## ORDER RE

- SELECTING CARRIER

AND ESTABLISHING SUBSIDY RATES

Summary

By th is O rder, the Department is re

- selecting Harris Aircraft Service s , Inc. (“Harris Air”)

, to provide Essential Air Service ( “ EAS ” ) at Port Alexander, Alaska

, at an annual subsidy

rate of $ 80,647

. 1 

### The s ervice to be provided will be two non stop round trips per week to

Sitka, Alaska

, using 3

- seat Cessna 185 aircraft, for the two

- year period from March 1,

2014, through February 28 , 2016.

B a c k g r o un d

By Order 2012

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- 15

, issued on February 21, 2012 , the Department re

- selected Harris Air to

provide subsidized EAS consisting of two nonstop round trips per week to Sitka, using

3

- seat Cessna 185 aircraft

, for the two

- year period ending February 28 , 201 4

, at an annual

subsidy rate of $ 75,293

.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.

### - 2

-

In a nticipation of the end of the current rate term, the Department issued Order 2013

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- 6

,

on September 9, 2013 , soliciting proposals to provide EAS, with or without subsidy

suppo rt

, at Port Alexander for a new two

- year term. In response to that Order, Harris Air

(the incumbent and only air carrier to respond) submitted a proposal offering to continue to

provide the same level of service it currently operates, consisting of two nonstop round

trips each week to Sitka with 3

- seat Cessna 185 aircraft.

T hat proposal, as well as t he complete public file for EAS at Port Alexander

, may be

accessed online through the Federal Dockets Management System at:

http://www.regulations.gov by entering “DOT

- OST

- 1999

- 6 244 ” in t he “SEARCH for:

Rules, Comments, Adjudications or Supporting Documents:” field.

Community Comments

On October 18 , 2013, the Department requested community comments regarding th is

carrier

- selection case

. In response, by letter dated November 7, 2013, De bra Rose Gifford,

Mayor of Port Alexander, submitted a letter stating “Harris Aircraft has done a fine job in

the past and we are in support of them serving our community again.”

D ecision

The decision is straightforward and clearly points to the re

- selection of Harris Air to

continue to provide EAS at Port Alexander for the period of March 1, 2014, through

February 28, 2016, at an annual subsidy rate of $80,647. The air carrier will mainta in its

current level of service, consisting of two nonstop round trips per week to Sitka

, utilizing

3

- seat Cessna 185 aircraft. We find that the subsidy rate is reasonable, and the air carrier’s

performance continues to be satisfactory.

Air Carrier Fitness

On April 16, 2013, Harris Air submitted an application for the determination of its fitness

to conduct commuter operations. That application is currently pending before the

Department’s Air Carrier Fitness division. However, no information has c ome to our

attention that would cause us to question the ability of Harris Air to conduct EAS at Port

Alexander

. Additionally, w e have contacted the Federal Aviation Administration, and it

has raised no concerns regarding Harris Air ’s current operations as an air taxi

.

This Order is issued under authority delegated in 49 CFR Part 1. 25 a( b ).

ACCORDINGLY,

1

. The Department re

- selects Harris Aircraft Service s , Inc.

, at Port Alexander, Alaska , and

establishes the subsidy rate, as detailed in Appendix B ;

2

. We direct Harris Aircraft Service s , Inc. to retain all books, records, and other source and

summary documentation to support claims for payment, and to preserve and maintain such

documentation in a manner that readily permits its audit and examination by

representatives of the Department. Such documentation shall be retained for seven years

from the service date of this Order or until the Department indicates that the records may

be destroyed, whichever comes first. Copies of flight logs for aircraft sold or disposed of

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-

must be retained. The air carrier may forfeit its compensation for any claim that is not

supported under the terms of this Order ;

3 . We f i nd that Harris Aircraft Service s , Inc. is fit, willing and able to operate as a n air

taxi

, and capable of providing reliable Essential Air S ervice at Port Alexander, Alaska ;

4

. D ocket DOT

- OST

- 1999

- 6 244 will remain open pending further Department action ; and

5 . We will serve copies of this Order on the Mayor and Airport Manager of Port

Alexan der, the Alaska Department of Transportation and Public Facilities, and Harris

Aircraft Services, Inc.

B y:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is ava ilable at

http://www.regulations.gov

### Appendix A

ANNUAL COMPENSA T ION REQUIREMENT FOR

ESSEN T IAL AIR S E RVICE AT

PORT ALE X ANDER, A L ASKA

EAS with Cessna 185 ; Two Round T rips/ W eek at 52 W e eks per year with a S eat Fare $1 30

. 23

Aircraft type C e ssna 1 8 5

Block Ho ur s 153

Re v enues

Passen g er $ 41,022

Mail $

- Cargo $ 1,500

Total Reve nu e $ 42,522

Flying op e rat i ons $ 29,920

Fuel &Oil $ 20,262

Insura n c e $ 7,248

Mainten a nce $ 14,313

De p r e c iation $ 6, 460

Dir e ct Expe n s e s Total $ 78,203

Indir e ct exp e ns e s =50% of

Dir e ct $ 39,101

Total Op e r at i ng Expense $ 117,304

Return at 5% $ 5,865

Total Eco no mic C o st $ 123,169

Total Reve nu e $ 42,522

Annual su b s i dy need at 1 0 0%

comp l eti o n $ 80,647

Not e s

1. 40 minutes per flight x 4 flights/w e ek x 52 we e k s x 1.1 weath e r turn aro u n d = 1 5 3 153.00 Block h o u r s

2. Numb e r of pass e ng e rs p er year 31 5 x $ 130.23 /passe n ger =$ 41,022.45 Pax Revenue

3. No mail. It is presu m ed the Eyak will carry all of the mail 0.00 Mail Revenue

4. Minimal freight. It is presu m ed the Eyak will carry the bu l k of freight 1500. 0 0 Frei g ht Rev e nue

5. Flying operations $ 105,600 /year divided by 5 40 flight hours=$ 195.56 Flying Ops c o st

6. 16 GPH x $ 6. 97 /gal plus oil

= $/hour 132.43 fuel/Oil

7. Insurance Liability $8,900+ $ 13,680+ 3 rd PL $3,000

= 25,580 divided by 5 40 47.37 Insura n c e

8. Depr e c iati o n $22

, 8 0 0/year di v ided by 540 hours=$/ h r 42.22 deprec i ation

9. Mainten a nce expe n s e s d ivided by flight hours= 50,517 93.55 M ainten a nce

Parts 19,517

Labor 31,000

Total 50,517

### Appendix B

Harris Aircraft Services, Inc.

Essential Air Service to be Provided at Port Alexander, Alaska

Effective Period : March 1, 2014 , through February 28 , 201 6

Scheduled Service : Two nonstop round trips per week to Sitka

Aircraft : 3

- Seat Cessna 185

Annual Compensation : $ 80,647

Rate per Eligible Flight: $ 388 1



### Weekly Ceiling for each community : $ 1,552 2

Note: The air c a rr i e r un d er st a nds t h a t it m a y f o rfe it its c omp e ns a tion f or a n y f li g hts th a t it do e s not op era te in

c o n f o r m a n c e with the t er ms a nd stipul a tions of the ra te Order

, i n c luding the s er vi c e pl a ns outlin e d in the Order a nd

a n y oth e r s i g ni f i c a nt e l e m e nts of the re qui re d s er vi ce , without p r ior a p p r ov a l. The air c arr i e r und e r st a nds th a t a n

a i r cr a f t t a k e

- o f f a nd l a nding a t its s c h e du l e d d e stin a tion c onstitut e s a c ompl e t e d f li g ht; a bs e nt a n e x pl a n a tion

suppo r ting subsi d y e li g i b ili t y f o r a f l i g ht th a t h a s n ot b ee n c ompl e t e d, su c h a s cer t a in w ea th e r ca n ce ll a tions, o n l y

c ompl e t e d f li g hts a r e c onsid ere d e l i g ible f or su b si d y

. I n a ddition, if the air carr i e r d o e s not s c h e dule or o p era t e its

f li g hts in f ull c on f o r m a n c e with the Order f o r a s i g ni f i ca nt p e r iod, it m a y j e op ar di z e its e nti r e subsi d y c l a im f or t he

p er iod in qu e stion. I f the air c a rr i e r c ont e mpl a t e s a n y su c h c h a ng e s b e y ond the s c ope o f the Order du r ing the

a ppli ca ble p e r iod of th e se ra t e s, it must f i r st noti f y the O ff i c e of Avi a tion An a l y sis in w r iti n g a nd r ece ive w r itt e n

a pp r o v a l f r om the D e p a r tm e nt to be e nsu re d o f f ull c omp e ns a tion. S hould c i rc umst a n ce s w ar r a n t , the D e p ar tm e nt

m a y l o c a te a nd s e l e c t a re pl a ce m e nt air c arr i e r to p r ovide s er vi c e on th e se r out e s. The air c a rr i e r must c ompl e te a ll

f li g hts th a t ca n b e s a f e l y op era t e d; f l i g hts th a t ov e rf l y points f o r l ac k of t r a f f ic will not be c omp e ns a t e d. I n

d e t er m i ning wh e t h e r subsi d y p a y m e nt f o r a d e v i a ting f l i ght should be a djust e d or dis a llow e d, t he D e p a r tm e nt will

c onsid e r the e x t e nt to whi c h the g o a ls of the p r og ra m a r e m e t a nd the e x t e nt of acce ss to the n a tion a l a ir

t ra nspo r t a tion s y s t e m p r ovid e d to the c ommuni t y

.

I f the D e p ar tm e nt unil a t e ra l l y

, e ith e r p a r ti a l l y or c ompl e t e l y , t er min a t e s or re du ce s p a y m e nts f or s e r vi c e or c h a ng e s

s er vi c e r e qui re m e nts a t a sp ec i f ic lo c a tion p r ovid e d f or und e r this Order, th e n, a t the e nd of the p e r iod f or whi c h the

D e p ar tm e nt d o e s m a ke p a y m e nts in the stipul a t e d a mounts or a t the stipul a t e d s er vi c e l e v e ls, the air c a rr i e r m a y

cea se to p r ovide s er v i c e t o th a t sp ec i f ic lo c a tion without re g a r d to a n y r e qui re m e nt f or noti c e of su c h c e ss a tion.

Those a djustm e nts in the l e v e ls of subsi d y a nd/or s er vi c e th a t ar e mutu a l l y a g r ee d to in w r iting b y the D e p ar tm e nt

a nd air ca r r i e r do not c on s titute a tot a l or p ar ti a l re d u c tion or ce ss a tion of p a y m e nt.

S ubsi d y c ont r a c ts ar e su b j ec t to, a nd in c o r po r a te b y r ef e re n c e

, r e l e v a nt st a t ut e s a nd D e p ar tm e nt r e g ul a tions, a s th e y

m a y be a m e nd e d fr om time to tim e . How e v er

, a n y su c h st a tut e s, r e g ul a tions, or a m e ndm e nts th ere to sh a ll not

op era te to c ont r o v er t the f o r e g oi n g p ar a g r a ph.

Funds may not be available for performance under this Order beyond January 15, 2014 . The Government’s

obligation for performance under this Order beyond January 15, 2014 , is subject to the availability of funds from

which payment for services can be made. No legal liability on the part of the Government for any payment may arise

for perf ormance under this Order beyond January 15, 2014 , until funds are made available to the Department for

performance. If sufficient funds are not made available for performance beyond January 15, 2014 , the Department

will provide notice in writing to the car rier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the

month for which compensation is being claimed. For example, claims for service provided in July must be filed by

October 31 st ; August clai ms must be submitted by November 30 th , and so on.

1 Annual compensation of $ 80,647 divided by 208 annual departures: 4 flights per week x 52 weeks.

2 4 arrivals and departures per week multiplied by $ 388 per flight

.